Saturday, February 15, 2020

Virus crisis could mean $7b drop in airline revenue: ICAO

MONTREAL • The coronavirus outbreak could mean a reduction of US$4 billion to US$5 billion (S$7 billion) in global airline revenue, said the International Civil Aviation Organisation (ICAO) on Thursday.

The United Nations agency reported that 70 airlines have cancelled all international flights in and out of China and 50 others have reduced their operations.

Preliminary estimates show this has meant a reduction of nearly 20 million passengers compared with expectations for the first quarter of this year. That figure equates to potential lost revenue of up to US$5 billion, the agency said.

In China, the virus has killed more than 1,300 people and infected over 64,000. Overseas, nearly 600 cases have emerged in around 30 locations.

“Prior to the outbreak, airlines had planned to increase capacity by 9 per cent on international routes to/from China for the first quarter of 2020 compared with 2019,” the ICAO said in a statement.

The reality has been a reduction in foreign airline traveller capacity of 80 per cent.

Japan looks to be the hardest hit from a reduction in Chinese air travellers in the first quarter, the ICAO said. The country could lose US$1.29 billion in tourism revenue, with Thailand not far behind at a US$1.15 billion loss potential.

The ICAO said the effects of the coronavirus outbreak on the airline industry are expected to be larger than in the 2002-2003 severe acute respiratory syndrome epidemic as flight cancellations are more widespread this time.

In addition, China’s international air traffic has doubled and its domestic air traffic increased fivefold in the last 17 years.

The Chinese authorities have locked down Hubei province, the epicentre of the outbreak, and restricted movements in several cities in an effort to contain the virus.

AGENCE FRANCE-PRESSE

Have a question on the coronavirus outbreak? E-mail us at askst@sph.com.sg

To get alerts and updates, follow us on Telegram.

Source: Read Full Article

No comments:

Post a Comment